Looking back on 2014Noah denkt™ reports on its prediction success in a year marked by the Ukraine crisis and the oil price slump, first drafted on May 7, published on May 8, 2015---------------------------------------------------------------------------------------------------------------------------------------

Dear Reader,

We have to apologize to you for the belated publishing of our 2014 success report. But the transition from 2014 to 2015 was quite eventful for us. Don’t forget that we started our Wikistrat collaboration in January (see footnote*); we received the "2015 Best of - Finance" award in March and on top of it we kept wrestling with technical issues related among others to a hick up between Java 8 and Yahoo Sitebuilder. So, it is only now that we find the peace of mind for a calibrated look back on our forecasting accuracy in the past year.

Before we do so, we would like to remind our readers about the fact that 2014 saw the 100th anniversary of the beginning of the First World War. Obviously, that First World War was the result of the first failed attempt of competing and imperialist European national states to accommodate the nascence of an equally chauvinist, yet unified Germany in 1871. Add to that the fact that this report will be published on May 8, 2015, when heads of states gather in Gdansk and Moscow to commemorate Nazi-Germany’s capitulation at the end of the Second World War you may understand why this projects spends so much time on defending the Franco-German friendship, a pan-European entente and the Euro currency.

With that in mind let´s look at the specifics of 2014. Four geopolitical events stand out and impacted the general market sentiment and that of ours most: the East-West conflict with Russia over Ukraine and Crimea, the sustained drop in the oil price and its effect, notably, on emerging markets, the continued austerity debate in the Euro-area and to some extent the surfacing of ISIS in Syria and Iraq. Our position on all four issues has been pretty coherent throughout:

No doubt, the European economy is currently starting to pick up steam. Unfortunately, it is quite unlikely though that this acceleration will reach the staggering double-digit proportions that Europe technically deserves after having made quite some painful headway in its economic restructuring. Instead it cannot be denied that current growth numbers are to some extent due to the ECB’s QE program and the effect this has had on the Euro exchange rates. Noah denkt™ continues to feel that the ECB’s deflation angst was overdone at the time and that more faith in austerity politics would have gotten us to the same spot anyway. Generally speaking though, the Eurogroup and the EU’s budget supervisors deserve praise for having maintained its austerity focus despite many attempts by Greece, Podemos and others to challenge that. Needless to say that Noah denkt™ did at no point betray its own pro-austerity convictions even though critics like Timothy Garton-Ash did occasionally manage to drain our emotional resolve. If doubters, even after the outcome of today’s British elections still feel that the austerity approach is unwanted at this time, we are hard pressed in deed to find any additional arguments to convince them otherwise.

If we feel that the current rise of growth expectations in Europe vindicates our firmness in matters of austerity advocacy, we have to admit that the oil price slump clearly caught us by surprise. What did not surprise us, however, was the fact that there were serious market surprises coming like the one that we saw in the oil market. On November 6, we published a dialogue to that effect echoing the voice of Paul Singer of Elliot Management. He had earlier alerted his shareholders to the fact that the dramatic money printing response to the equally dramatic 2008 financial crash cannot continue without causing a lingering string of disruptive, yet hard to predict side effects. Noah denkt™ continues to share Mr. Singer’s view in this matter and believes that current market events like the slowing down in China, the Emerging Market drop and the hiccup in the US should also be understood in the context of that string of unwelcome surprises which the massive Keynesian rescue efforts post-2008 cause to this day. After all, it is no surprise that the world economy is still processing and working through the near-death health scare it experienced during the financial crisis. And despite ,or perhaps due to all the money printing, serious growth will probably not come for quite some time.

Before we go to the numbers, we should briefly also address the ISIS/jihad issue in Syria and Iraq, not the least because of the atrocities committed by terrorism there and elsewhere. Clearly, these are difficult times for kids, notably in the West. The labor market is undergoing tremendous change and the rise of new technologies makes it ever more difficult for all of us to generate a sustainable income perspective for the future. Add to that the emotional stress that come with the need to be acknowledged and recognized by your peers and by opinion leaders. So it is to a certain extent understandable that some kids crack up and hope to find a remedy for their despair in jihad fundamentalism. Nevertheless we are convinced that this is a temporary aberration which will eventually lose its current fervor due to its own internal pathology. It is also our opinion that it is a mistake by public opinion to criticize the West over a supposed lack of a coherent strategy for the Middle East. We still believe that Western actions in the Middle East need to be open to improvisation because of the unpredictable nature of the crosscurrents in the region. Noah denkt™ has therefore supported the US air campaign against ISIS. And our project is not overly concerned by the tentative, sometimes tacit and involuntary US cooperation with Iran and other Shia forces given the absence of acceptable alternatives. Generally speaking, we continue to believe that a realpolitik approach beats any kind of moral or social hysteria at any time.

As usual we end these reviews with a look at the precise value added of our forecasting. On January 31, 2014we changed our previously bullish sentiment to a more bearish one. (“We believe that markets won’t be able to shrug [the emerging market debt crisis] off as easily as our first intuition might have suggested. Instead we fear that this could be the beginning of a more sustained period of uncertainty surrounding the emerging market success story”) And on March 31, 2014, we returned to a moderately bullish attitude for the rest of the year. (Alter Ego of Noah denkt™: “That sounds pretty optimistic. Is your market sentiment consequently getting bullish again? Answer Noah denkt™: Obviously, you are aware that our views on the economy tend to have an early bird side to it. With that in mind our answer to your question is: ’Yes’ “) . Measuring our mood swings against the market indexes therefore reads as follows:

Footnote *: On June 29, 2015, the Mastermind of Noah denkt™ terminated his collaboration with Wikistrat. It turned out to be too difficult to juggle his dual responsibilities in the Landei selbstVerlag and on Noah denkt™ with those on Wikistrat. The Mastermind of Noah denkt™ is grateful to the Wikistrat management team for having invited him to participate as a Senior Analyst on the Wikistrat platform.

Reminder: Noah denkt™ is a project of Wilhelm ("Wil") Leonards and his Landei Selbstverlag (WL & his LSV). Consequently, all rights to the texts that have been published under the Noah denkt™brand name are reserved by WL & his LSV.

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